Question

Cone Corporation is in the process of preparing its December 31, 2021, balance sheet. There are some questions as to the proper classification of the following items:

1. $50,000 in cash restricted in a savings account to pay bonds payable. The bonds mature in 2025.
2. Prepaid rent of $24,000, covering the period January 1, 2022, through December 31, 2023.
3. Notes payable of $200,000. The notes are payable in annual installments of $20,000 each, with the first installment payable on March 1, 2022.
4. Accrued interest payable of $12,000 related to the notes payable.
5. Investment in equity securities of other corporations, $80,000. Cone intends to sell one-half of the securities in 2022.

Required:
Prepare the asset and liability sections of a classified balance sheet to show how each of the above items should be reported.

Answer 1

Please give positive ratings so I can keep answering. It would help me a lot. Please comment if you have any query. Thanks!

Cone Corporation
Assets	Amount $
Current Assets
Investment in equity securities	40,000.00
Current Assets	40,000.00
Non Current Assets
Prepaid Rent	24,000.00
Investment in equity securities	40,000.00
Non Current Assets	64,000.00
Other Assets
Restrictive cash	50,000.00
Other Assets	50,000.00
Total Assets	154,000.00
Liabilities & Stockholder's Equity
Liabilities
Current Liabilities
Notes payable- Current Portion	20,000.00
Accrued interest payable	12,000.00
Current Liabilities	32,000.00
Non Current Liabilities
Notes payable- Non Current Portion	180,000.00
Non Current Liabilities	180,000.00
Total Liabilities	212,000.00